The Federal Bureau of Investigation (FBI) on September 19, 2011 released the following:

“SAN FRANCISCO—A federal grand jury in San Francisco charged Bassam Yacoub Salman, 52, of Orland Park, Ill., with conspiracy and securities fraud relating to an insider trading scheme in which he made profits in excess of $1.1 million, United States Attorney Melinda Haag announced.

The indictment, which was unsealed today, stems from the insider trading scheme first charged in 2009 against Maher Fayez Kara, of San Carlos, Calif., a former investment banker at Citigroup Global Markets Inc. in New York; Maher Kara’s brother, Mounir Fayez Kara, also known as Michael F. Kara, of Walnut Creek, Calif.; and Emile Youssef Jilwan, of Pleasanton, Calif.

According to the indictment, Maher Kara misappropriated material, non-public information about confidential corporate acquisitions, financings and other transactions in New York, in violation of his fiduciary duty and duty of trust and confidence to Citigroup and its clients. He then tipped his brother, Mounir Kara, about the confidential transactions. Mounir Kara then tipped Salman, who is charged with trading on the material, non-public information in the securities four publicly traded biotechnology companies from 2005 through 2007.

Citigroup was one of the victims of the charged criminal conduct and has cooperated in the investigation conducted by the United States Attorney’s Office and the Federal Bureau of Investigation.

Salman was arrested by the FBI on Sept. 9, 2011, in Illinois and ordered to appear before Magistrate Judge Jacqueline Scott Corley in San Francisco today. After his court appearance, he was released on a $250,000 unsecured bond and ordered to surrender his passports. The defendant’s next court appearance is scheduled for Oct. 5, 2011.

The maximum statutory penalty for each count of securities fraud in violation of 15 U.S.C. § 78ff is 20 years and a fine of $5 million, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant United States Attorney Adam A. Reeves is prosecuting the case with the assistance of Christine Tian and Rayneisha Booth. The prosecution is the result of a long-term investigation by the FBI. The United States Attorney’s Office wishes to recognize the assistance of the Division of Enforcement of the SEC’s San Francisco Regional Office.

Please note, an indictment contains only allegations against an individual and, as with the defendants, Bassam Salman must be presumed innocent unless and until proven guilty.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.